Name: WVS FINANCIAL CORP Q2 2022 Earnings Call
Start: 2022-01-28T00:00:00.000Z

Executive Summary

Q2 FY2022 (three months ended December 31, 2021): Net income $0.33M and diluted EPS $0.19 vs $0.355M and $0.20 in prior-year quarter; sequentially stronger vs Q1 FY2022 ($0.271M, $0.16), with modest operating leverage from lower non-interest expense .
YoY pressure stemmed from lower interest income (−$0.112M) and slightly higher non-interest expense (+$0.043M), partly offset by lower interest expense (−$0.071M), higher non-interest income (+$0.035M), and a reduced loan loss provision (−$0.014M) .
Credit remained clean: no loans in COVID-19 deferral status, with management continuing to reverse the COVID-19 allowance portion through FY2022, supporting lower provisioning .
Catalysts: cost roll-off from Bellevue branch closure, reversal of COVID-19 allowance, and a rising-rate backdrop that began to lift net interest income by Q3 FY2022 ($0.338M, $0.19) as yields improved and expenses eased .

What Went Well and What Went Wrong

Sequential improvement Q/Q: net income rose to $0.330M (Q2) from $0.271M (Q1) as non-interest expense fell ($0.919M vs $0.932M) and net interest income increased ($1.202M vs $1.144M) .
Provision tailwinds and clean credit: provision fell YoY by $0.014M; “As of December 31, 2021, the Company continued to have no loans in COVID-19 deferral status,” and management anticipated continued reversal of the COVID-19 portion of the allowance .
Non-interest income YoY improvement (+$0.035M) driven by investment securities gains and higher service charges on deposits .

Lower interest income YoY (−$0.112M) on lower market yields and lower average loan balances; net interest income fell YoY (−$0.041M) .
Non-interest expense rose YoY (+$0.043M), notably occupancy and equipment (+$0.026M) tied to the Bellevue branch closure, and higher salaries/benefits (+$0.012M) .
Rising dependence on short-term FHLB funding increased from $113.1M (6/30/21) to $148.6M (12/31/21), while Tier 1 leverage ratio declined from 11.71% to 10.85%, modestly tightening capital cushion .

Metric	Q2 2021 (Dec 31, 2020)	Q1 2022 (Sep 30, 2021)	Q2 2022 (Dec 31, 2021)
Interest income ($USD Thousands)	$1,459	$1,319	$1,347
Interest expense ($USD Thousands)	$216	$175	$145
Net interest income ($USD Thousands)	$1,243	$1,144	$1,202
Provision for loan losses ($USD Thousands)	$(8)	$(14)	$(22)
Non-interest income ($USD Thousands)	$103	$138	$138
Non-interest expense ($USD Thousands)	$876	$932	$919
Pre-tax income ($USD Thousands)	$478	$364	$443
Income taxes ($USD Thousands)	$123	$93	$113
Net income ($USD Thousands)	$355	$271	$330
Diluted EPS ($USD)	$0.20	$0.16	$0.19
Weighted avg diluted shares	1,749,372	1,738,227	1,740,704

KPIs and Balance Sheet

Metric	Jun 30, 2021	Sep 30, 2021	Dec 31, 2021
Total assets ($USD Thousands)	$346,078	$351,664	$355,571
Deposits ($USD Thousands)	$157,167	$155,288	$161,385
FHLB advances - short-term ($USD Thousands)	$113,093	$115,594	$148,600
FHLB advances - long-term fixed ($USD Thousands)	$10,000	$10,000	$5,000
FHLB advances - long-term variable ($USD Thousands)	$25,000	$25,000	$0
Equity ($USD Thousands)	$38,389	$38,421	$38,222
Book value per share – Common ($)	20.37	20.39	20.29
Annualized ROAA (%)	0.40%	0.31%	0.51%
Annualized ROAE (%)	3.40%	2.82%	4.71%
Tier 1 leverage ratio (%)	11.71%	10.95%	10.85%

Segment breakdown: WVFC does not report discrete segments; results reflect the holding company for West View Savings Bank .

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue/Net interest income	FY2022/Q3-Q4	—	—	No formal guidance communicated in Q2 2022 8-K press release
Non-interest expense	FY2022	—	—	No formal guidance; press release cites occupancy reductions tied to Bellevue closure
Provision/credit	FY2022	—	—	Management anticipated continued reversal of COVID-19 allowance portion through FY2022
Dividends	FY2022	—	—	No dividend update in Q2 2022 press release

Note: No earnings call transcript found for Q2 FY2022; themes drawn from press releases.

Topic	Previous Mentions (Q4 FY2021 and Q1 FY2022)	Current Period (Q2 FY2022)	Trend
COVID-19 allowance and loan deferrals	No deferrals; plan to reverse COVID-19 allowance through FY2022 was highlighted in Q1 FY2022	No loans in deferral; continued reversal anticipated	Improving/normalizing credit
Branch optimization (Bellevue closure)	Closure-related costs noted in FY2021/Q4	Occupancy/equipment expense increase YoY tied to closure; sequential cost containment evident	Cost roll-off supportive
Funding mix and rates	Lower rates paid on deposits/FHLB; lower average FHLB borrowings Q/Q in Q1 FY2022	Lower rates paid on deposits/FHLB; short-term FHLB usage higher at 12/31	Rate tailwinds vs higher FHLB utilization
Yield dynamics on securities/loans	Lower yields on floating-rate MBS pressured interest income in FY2021/Q4	Lower market yields and lower average loan balances reduced interest income YoY	Transition to rising-rate improvement into Q3 FY2022
Non-interest income (gains/PLMBS OTTI)	Gains and absence of OTTI supported income in Q4 FY2021	Investment securities gains and higher service charges lifted non-interest income YoY	Volatile; decreased gains noted in Q3 FY2022

“As of December 31, 2021, the Company continued to have no loans in COVID-19 deferral status. The Company anticipates continuing to reverse the COVID-19 portion of the allowance for loan and lease losses throughout fiscal 2022” .
“The decrease in interest expense… was primarily attributable to lower rates paid on deposits and Federal Home Loan Bank (FHLB) advances” .
“The increase in non-interest expense was primarily attributable to an increase of $26 thousand in occupancy and equipment expense (mostly attributable to costs associated with closing the Bellevue branch)” .
Follow-through into Q3 FY2022: “Net interest income [up]… decrease in non-interest expense… lower salaries/benefits… [and] decrease in occupancy costs due to the closure of the Bellevue branch” .

No earnings call transcript was available for Q2 FY2022; key disclosures are contained within the 8-K press release .
No additional Q&A clarifications or estimate commentary were provided in the period documents .

S&P Global consensus estimates for WVFC were unavailable for Q2 FY2022; we attempted retrieval and no CIQ mapping was found. As a result, beat/miss vs consensus cannot be determined.
Actuals: Diluted EPS $0.19; Net interest income $1.202M; Non-interest income $0.138M; Net income $0.330M .

Sequential improvements in Q2 and further in Q3 point to early benefits from rate normalization and expense discipline; Q2 EPS $0.19 and Q3 EPS $0.19 despite higher pre-tax in Q3 suggests stable earnings power entering a rising-rate environment .
Credit remains benign with no COVID deferrals and continued allowance normalization, providing recurring support to earnings via lower provisioning .
Funding reliance on short-term FHLB advances increased into Q2; monitor interest-rate sensitivity and refinancing costs as advances reprice .
Cost trajectory should improve as Bellevue closure costs roll off; Q3 commentary noted decreases in salaries/benefits and occupancy .
Non-interest income contributions are variable (gains, PLMBS OTTI reductions); treat as opportunistic rather than structural drivers .
Capital cushion remains adequate but modestly lower (Tier 1 leverage 10.85% vs 11.71% at FY2021); watch capital ratios if loan growth or rate shifts accelerate .
Near-term trading: limited estimate visibility reduces beat/miss catalysts; focus on NIM trajectory, FHLB funding mix, and expense trends as primary stock drivers .